Where Have Economic Sanity and Courage Gone?

As many of you know, in our “Rethinking National Security” blog and elsewhere, I have tried to argue against the devastation that is being done to our nation and to the world by the “crazies” of our society and especially by those who would in our politics be the handmaidens of making the very rich richer and the middle class and especially the poor, poorer. The politics of “austerity” has been and will be a major global disaster.  In the end it makes our nation poorer, our world less safe, and our global community dysfunctional.

The downward global spiral we are experiencing is very likely far more dangerous to our nation and to people around the globe than any threat from terrorism. Yet our response so far has been, both here in America and in Europe, pathetic and wrong headed…not just my judgment but that of just about every respected economist one can ask.

Recently in the New York TimesRobert Reich, not only an eminent economist and former Labor Secretary, but also a Rhodes Scholar, has set forth in considerable detail and undeniable facts the consequences of denying fair compensation and a fair say in the politics of our nation from the average American family due to the corruption fostered by great wealth in the hands of a greedy few.  A recent article in the New Yorker by Jane Mayer, “The billionaire Koch brothers’ war against Obama” posted Aug. 30, 2010, essentially reinforces the argument that we have become a government of wealth for wealth.  These documents, including the influence of the Koch brothers and others, detail the ascendancy and power of “crazy” right-wing radicals on American politics and media.

On Thursday night we will hear from President Obama on our economic crisis and especially on the question of how to get productivity and especially jobs back on the American agenda. I hope this will start a debate away from the false, fear-induced idea of “debt,” which has always been promoted by those who fear that their wealth will be impacted and that the average citizen and worker might gain a voice.

Many voices are asking for a wide and bold perspective in this key speech. I hope he will mention the larger global trends that sway our economy and reaffirm the call he made two years for strong international cooperation to face this international crisis.  A lot is at stake, including the kind of global society our children will inherit.

More comments after the speech.

We welcome your comments.

By Harry C. Blaney III.

One thought on “Where Have Economic Sanity and Courage Gone?

  1. Harry C. Blaney III September 9, 2011 / 2:53 PM

    The President’s Joint Session of Congress Speech: American Jobs Act: Comments

    The proposed jobs package totals, by White House estimates, some $447 billion. This includes the tax payroll cuts and incentives for new hiring, etc. The plan was larger than some expected but still not as large as many experts believe is necessary to make a very big difference given the magnitude of the forces pushing our economy down. It likely was crafted in the hope that it could gain some support on the Hill. As always, the devil is in the details including the type of cuts that are promised to pay for the package.

    Advance billing said the total cost would be $300 billion, which would be a trivial amount in the American economy and insufficient to fully stimulate our economy. Some $240 billion would be in direct assistance with $140 billion going for infrastructure and $62 billion for long-term unemployment assistance. Part of the package also provides $35 billion in state assistance aimed at stopping the layoffs of teachers as well as police and firefighters. It would have been far better to have more used for direct job creation, but it will be of great importance for those who have been out of work and where there are not jobs to be had.

    Frankly, these current initiatives were not, in themselves, bold enough to achieve the goals he outlined in the speech to make America competitive in the world economy and seriously cut unemployment and get enough people back to work fast enough to bring our economy from its current doldrums. That was its fundamental flaw. But Obama promised more efforts in the future.

    But it was better than nothing and it will have great difficulty getting enacted given the Republican intransigence to anything that will make our economy grow before November 2012. They will be happy however to cut Medicare and Medicaid for the aged and the poor, and cut government spending, except for DOD. Their cuts would put even more people out of work as soon as possible. The president said he would support cutting regulations, except for those that would protect safety, health or environment.

    The speech contained some stirring language in his support of getting America to “race to the top,” his call for unity, and in asking Americans to lift their voice to support these programs and goals. The danger is the disappointment that might follow if either it all fails or is enacted in a weak form, like the earlier stimulus package, which was too little or over too short a time to make a major difference in the lives of those without work or those fearing that they would soon lose their own jobs.

    Obama wanted America to be competitive globally and called for us to produce around the world goods with “Made in America” on them. He called rightly for education and training but how can this take place at the necessary scale when the “agreed” bi-partisan trajectory is to cut government funding drastically?

    He called for added taxes on the rich but unless he is willing to go to the mat on this it will not happen – that is the last thing the GOP will accept without a major turn of public opinion and perception of a loss in the election which would force this on them. The opinion polls say he is supported by the public but they also say they want cuts to the government budget but no cuts on their benefits or programs they like, and other contradictory views. Plus the conservative media like Fox News and radio talk shows are driving the debate on the “deficit” and cuts on government spending so that a tax on the rich can be avoided and only cuts in government and safety net programs will result. Obama said there would be even greater cuts in government programs – but where???? In diplomacy, science, and education, or global development, peacekeeping, and food programs?

    He did promise there would be other efforts but did not outline what they might be. He did say he would take this issue to the American people in a series of speeches and trips around the country. In the meantime the American and global economy is feeling the impact of cuts abroad in governmental spending and in additional job losses in many key countries.

    There were few international elements except the expected endorsement of the pending trade pacts with South Korea, Columbia and Panama, which he said had to be accompanied by assistance to displaced workers in America due to loss of jobs from imports. The Republicans want the trade pacts without strings since they believe they will bring down wages, help American industry send jobs abroad, and make profitable investment and goods produced by cheap wages to create higher profits here in the U.S. Big business has a long history of off-shoring jobs and these pacts will make it easier unless there are stiff protections. The president thinks there will be perhaps some benefits for our trade but knows no trade pact will likely be agreed upon unless there are protections for union rights, environmental safeguards, and other conditions that will make for a fair playing field. The Republicans have refused to accept strong enforcement wording and most Democrats won’t support watered-down, meaningless words without effective teeth.

    Among the most promising elements of the speech was the support for a refinancing of mortgages and higher taxes on the rich to pay for these programs. He called to build an economy that will last in the future. But to do that takes more than is on offer.

    The simple fact is that other governments around the world are cutting back with austerity measures and cuts in spending that threaten a global quasi-depression. No mention was made of the need for governments around the world to take up just the opposite direction – namely a concerted effort to re-float their economies in unison and grow out of the debt and unemployment cycle that most nations are now moving towards. Perhaps he has consulted with other leaders and saw that it is not likely that the other conservative governments in Europe and Asia will opt for a growth policy rather than deflation and a deeper recession and loss of productivity which may never come back. If so that is perhaps the most depressing news of all for everyone, including America. Let’s hope that everyone comes to their senses before that cycle takes all of us down the path of disaster.

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